Just bought Gap Insurance and saved a fortune!

[Damo]

Skoda wanted £299 for Gap Insurance on my new Fabia 1.2TSi Colour Edition Hatchback that I picked up yesterday.

 

Just bought it through www.gapinsurance.co.uk instead, using the Briskoda discount for a total of £65!

 

Liked the face book page and will also get £5 back (so £60 for 3 years cover!)

 

Only gripe is it has to be 3 or 4 years cover, instead of half years like the Skoda one offered, and most PCP's are 42 months

 

Went for 3 years cover anyway, as thats when most of the depreciation would occur.

 

Really happy with the deal, considering I've paid only a fifth of Main dealers price

 

Thanks guys

 

Regards

 

Damo

[WaveyDavey]

We did the same with the Citigo.... Went for a four year policy rather than Skoda's three years and with a higher payout limit compared to Skoda's and came in at around £80 I think.

[David@GAPInsurance]

12 hours ago, Damo said:

Skoda wanted £299 for Gap Insurance on my new Fabia 1.2TSi Colour Edition Hatchback that I picked up yesterday.

 

Just bought it through www.gapinsurance.co.uk instead, using the Briskoda discount for a total of £65!

 

Liked the face book page and will also get £5 back (so £60 for 3 years cover!)

 

Only gripe is it has to be 3 or 4 years cover, instead of half years like the Skoda one offered, and most PCP's are 42 months

 

Went for 3 years cover anyway, as thats when most of the depreciation would occur.

 

Really happy with the deal, considering I've paid only a fifth of Main dealers price

 

Thanks guys

 

Regards

 

Damo

 

12 hours ago, WaveyDavey said:

We did the same with the Citigo.... Went for a four year policy rather than Skoda's three years and with a higher payout limit compared to Skoda's and came in at around £80 I think.

 

Thank you for your custom and for posting feedback!

 

Damo, (and anyone else reading this) in response to your comments about the duration, you are correct that we can only offer whole-year cover however, you do have the ability to cancel a policy part-way through and claim a pro-rata rebate of unused premium.  E.g. if you had finance for 42 months and wanted the GAP cover to match the same term, you'd initially buy a 48 month policy but then at the point you hand the car back or part exchange it in etc at 42 months, you'd cancel the GAP insurance policy and claim a rebate of the value of the remaining 6-months.

 

So for example, your 3yr policy cost £65... the 4yr equivalent is £94.13.

 

Buying the £94.13 policy and then cancelling with exactly 6-months remaining would result in you being able to claim back circa £11.77 (I've calculated this on a monthly basis for ease, but the actual calculation at the time of cancellation is a daily calculaton) either as a refund or to be carried forward against the cost of a new policy (unlike other GAP providers, we charge no cancellation or admin fees etc).

 

Something else to consider as well... I notice that your vehicle is brand new... that being the case, if you got any discount off the full list price, at the time of any claim you'd be better off with Replacement GAP insurance rather than Invoice GAP insurance:

• Invoice GAP insurance - Aims to pay the difference between your Motor Insurance payout and the original invoice price you paid for the vehicle *after discount*
• Replacement GAP insurance - Aims to pay the difference between your Motor Insurance payout and the greater of either the original price you paid for the vehicle *after discount* OR the cost of replacing the vehicle with a brand new equivalent at the time of claim

(You may well be aware of this and opted for Invoice GAP insurance anyway Damo (which is fine) but I'm including this here for other reader's benefit too.)

 

Damo, if you want to organise changing your policy from 3yrs to 4yrs or from Invoice to Replacement etc, just give me a shout.

[Damo]

Thanks David but I'm happy with the cover and term (some don't even take out Gap Insurance which is a bit silly if you ask me)

3 years cover should see me about ready to trade up again.

Great prices by the way, very happy customer

[David@GAPInsurance]

7 minutes ago, Damo said:

Thanks David but I'm happy with the cover and term (some don't even take out Gap Insurance which is a bit silly if you ask me)

3 years cover should see me about ready to trade up again.

Great prices by the way, very happy customer

 

No trouble. You're welcome.

 

FYI As things stand at the moment, you'd have the option to renew the policy upon expiry for a further year (or two years) *IF* you decided to keep the vehicle longer than 36 months so you should still have options available to you then.

[tigermad]

On 01/02/2017 at 12:38, David@GAPInsurance said:

 

No trouble. You're welcome.

 

FYI As things stand at the moment, you'd have the option to renew the policy upon expiry for a further year (or two years) *IF* you decided to keep the vehicle longer than 36 months so you should still have options available to you then.

Can you pay for the gap insurance monthly?

[David@GAPInsurance]

On 13/02/2017 at 21:47, tigermad said:

Can you pay for the gap insurance monthly?

 

Sorry tigermad - I only just saw this!

 

At this moment in time I'm afraid it's payment upfront by either credit or debit card.

[tigermad]

3 minutes ago, David@GAPInsurance said:

 

Sorry tigermad - I only just saw this!

 

At this moment in time I'm afraid it's payment upfront by either credit or debit card.

No problem. I should have the money when I'm ready. I will definately go ahead with your gap but not sure which one.  

[David@GAPInsurance]

1 hour ago, tigermad said:

No problem. I should have the money when I'm ready. I will definately go ahead with your gap but not sure which one.  

 

Assuming you're buying the vehicle, at their most basic level the easiest comparison is to consider that at the very least the Replacement GAP insurance policy will provide exactly the same level of cover as an Invoice GAP insurance policy would... though it's primary aim is to provide you with a higher level of cover.

 

E.g. you can't lose out other than by the difference in cost between the two of them but... the only way that would happen would be if the replacement vehicle price at the time of claim had fallen to an amount lower than the price you originally paid for your vehicle, in which case the Replacement GAP insurance effectively reverts to Invoice GAP insurance.

 

If you need any assistance whatsoever in selecting appropriate cover for your needs, please just ask.

 

David

[tigermad]

 

28 minutes ago, David@GAPInsurance said:

 

Assuming you're buying the vehicle, at their most basic level the easiest comparison is to consider that at the very least the Replacement GAP insurance policy will provide exactly the same level of cover as an Invoice GAP insurance policy would... though it's primary aim is to provide you with a higher level of cover.

 

E.g. you can't lose out other than by the difference in cost between the two of them but... the only way that would happen would be if the replacement vehicle price at the time of claim had fallen to an amount lower than the price you originally paid for your vehicle, in which case the Replacement GAP insurance effectively reverts to Invoice GAP insurance.

 

If you need any assistance whatsoever in selecting appropriate cover for your needs, please just ask.

 

David

Thanks. I will be having a 42 month pcp and I have ordered a car with all the extras with a discount. Invoice price after discount but before deposit is £30700 Before discount it's nearly £32,600. 

Im guessing it's best to choose the vehicle replacement one but at which amount?

Edited 22 February, 2017 by tigermad

[David@GAPInsurance]

4 hours ago, tigermad said:

 

Thanks. I will be having a 42 month pcp and I have ordered a car with all the extras with a discount. Invoice price after discount but before deposit is £30700 Before discount it's nearly £32,600. 

Im guessing it's best to choose the vehicle replacement one but at which amount?

 

Indeed. Replacement GAP insurance would be the superior of the two because in the event of a claim it'll be focused on the list price of a new equivalent vehicle at the time of the claim which is already (and likely to remain) higher than the invoice price you're paying this time around.

 

In terms of cover level (Claim Limit)... there's a number of schools of thought on this but the easiest way we find to approach it is to take today's list price (£32,600) and deduct from that, the sum of the the final/balloon repayment due at the end of the PCP term.   We then recommend a Claim Limit to cover at least that amount.

 

For example, if the balloon repayment was say, £17,000.  The difference between that and £32,600 would be £15,600.  In which case we'd recommend an absolute minimum Claim Limit of £17,500 because the next option down would be £15,000 which is lower than this calculated figure.  However... with Replacement GAP insurance you also need to consider the potential for the list price of the new equivalent vehicle to increase over time so, I'd suggest that it'd be prudent (in this example) to step the claim limit up to at least £20,000 (the next option up) to attempt to allow for such pricing fluctuation in the list price and/or further depreciation of your own vehicle value.

 

The next level up from £20,000 jumps to £25,000 which I'd suggest, based on a vehicle bought for £32,600) would possibly be well in to the realms of overkill but something to keep in mind is that the cost difference in increasing the Claim Limit at the time of purchasing the policy could well be small fry compared to the financial difference it'd make if at the time of claim you didn't have enough of a Claim Limit.  Thus having what might appear at first glance a very high Claim Limit is not necessarily a bad thing.

 

Obviously I don't yet know what your final/balloon repayment is under your PCP agreement but if you do the sums and follow my logic above you should be able to arrive at a suitable Claim Limit.  Of course I'm more than happy to assist in this regard if you want me to.

 

Best wishes

 

David

[tigermad]

...see below 

 

 

Edited 22 February, 2017 by tigermad

[tigermad]

10 minutes ago, David@GAPInsurance said:

 

Indeed. Replacement GAP insurance would be the superior of the two because in the event of a claim it'll be focused on the list price of a new equivalent vehicle at the time of the claim which is already (and likely to remain) higher than the invoice price you're paying this time around.

 

In terms of cover level (Claim Limit)... there's a number of schools of thought on this but the easiest way we find to approach it is to take today's list price (£32,600) and deduct from that, the sum of the the final/balloon repayment due at the end of the PCP term.   We then recommend a Claim Limit to cover at least that amount.

 

For example, if the balloon repayment was say, £17,000.  The difference between that and £32,600 would be £15,600.  In which case we'd recommend an absolute minimum Claim Limit of £17,500 because the next option down would be £15,000 which is lower than this calculated figure.  However... with Replacement GAP insurance you also need to consider the potential for the list price of the new equivalent vehicle to increase over time so, I'd suggest that it'd be prudent (in this example) to step the claim limit up to at least £20,000 (the next option up) to attempt to allow for such pricing fluctuation in the list price and/or further depreciation of your own vehicle value.

 

The next level up from £20,000 jumps to £25,000 which I'd suggest, based on a vehicle bought for £32,600) would possibly be well in to the realms of overkill but something to keep in mind is that the cost difference in increasing the Claim Limit at the time of purchasing the policy could well be small fry compared to the financial difference it'd make if at the time of claim you didn't have enough of a Claim Limit.  Thus having what might appear at first glance a very high Claim Limit is not necessarily a bad thing.

 

Obviously I don't yet know what your final/balloon repayment is under your PCP agreement but if you do the sums and follow my logic above you should be able to arrive at a suitable Claim Limit.  Of course I'm more than happy to assist in this regard if you want me to.

 

Best wishes

 

David

Thanks David. The final balloon is 10900 so I guess I would plump for the £25000 one. Car isn't due until early May so have a while yet. 

 

Edited 22 February, 2017 by tigermad

[David@GAPInsurance]

12 minutes ago, tigermad said:

Thanks David. The final balloon is 10900 so I guess I would plump for the £25000 one. Car isn't due until early May so have a while yet. 

 

 

Yes, using the same logic I'd arrive at £25,000 too.

 

That balloon seems low... out of interest, what annual mileage is that based on?

[tigermad]

8 minutes ago, David@GAPInsurance said:

 

Yes, using the same logic I'd arrive at £25,000 too.

 

That balloon seems low... out of interest, what annual mileage is that based on?

It's for 15k miles. I am paying around £4000 deposit in total. See pic for example similar. 

Edited 22 February, 2017 by tigermad

[tigermad]

Why did you think it seemed low? Im still unclear how gap works with someone on a PCP. Why would I need to have £25000 limit if you would only be covering the shortfall from the insurance company? The car is worth £31k so why would the insurance only pay out £6k?

Edited 23 February, 2017 by tigermad

[David@GAPInsurance]

2 hours ago, tigermad said:

Why did you think it seemed low? Im still unclear how gap works with someone on a PCP. Why would I need to have £25000 limit if you would only be covering the shortfall from the insurance company? The car is worth £31k so why would the insurance only pay out £6k?

 

There was no scientific reasoning behind my thoughts that the GFMV seemed low... it was just a feeling... we obviously have people giving us their PCP figures day in and day out and based on the types of figures people have been giving us recently for similarly priced vehicles over similar durations, it just seemed a tad low.  There could be a whole host of reasoning behind this though but it's almost certainly due to the the fact that your annual mileage of 15k is a little higher than average hence why I asked and consequently the finance company's expected depreciation of this vehicle will be higher than others.

 

In terms of how GAP insurance works for a PCP agreement... I apologise in advance... this is going to be a long post!  Grab a coffee.

 

Firstly, you need to consider that the GFMV of £10,900 is basically the finance company's attempt at predicting what your vehicle is going to be worth at the end of the PCP term (in reality there's a number of things that can affect this so it's not strictly the case, but humour me for while).  In an ideal world they'd be bang on and under normal circumstances neither you nor they "lose" out.  Of course, under the terms of the PCP if you get to the end and actually find that it's worth less than this figure, you can (subject to certain conditions) hand it back and walk away with nothing else to pay but, if you found it was actually worth more then you'd be able to either buy it outright at the "bargain" price of £10,900 OR (as the dealer will hope) part exchange it in and use the equity as (or towards) a deposit on your next car.

 

Whether the PCP theory above is likely to work is a whole other debate. 

 

Bringing it back to the subject of GAP insurance, lets assume that the vehicle is written off say, a week before you're due to either hand it back to the finance company or pay that £10,900 and keep it.  Let's further assume (only for the sake of a nice simple example) that the finance company were bang on with their prediction of the future value of the vehicle and your Motor Insurer is paying out £10,900.

 

Further, let's assume that the replacement price of a brand new equivalent vehicle by that time has for whatever reason (facelifted, better spec, economic influences etc) now increased to £34,000.

 

In THIS example...

 

Without GAP insurance:

• Your Motor Insurance payout goes directly to settle the remaining balance of the finance agreement.
• You have £0 funds (other than whatever is in your own "pocket") to put towards your next car.

With Invoice GAP insurance:

• Your Motor Insurance payout goes directly to settle the remaining balance of the finance agreement.
• The GAP insurance policy pays the £19,800 difference between your £10,900 Motor Insurance payout and the £30,700 original invoice price.
• You have £19,800 to put towards your next car
• You're still £3,300 short of the replacement price of buying a brand new equivalent of the same vehicle again though (assuming you wanted to) so you'd either have to fund the difference yourself, negotiate a deal, or buy something else.

With Replacement GAP insurance:

• Your Motor Insurance payout goes directly to settle the remaining balance of the finance agreement.
• The GAP insurance policy pays the £23,100 difference between your £10,900 Motor Insurance payout and the (now increased) £34,000 replacement price of replacing the vehicle with a new equivalent.
• You have £23,100 to put towards your next car.

 

Logic:

 

Clearly, if your vehicle is written off earlier, your car won't have depreciated by as much, the new equivalent vehicle replacement price may not have increased and the settlement figure on your finance agreement is going to be higher.  But, the principal remains the same.  The trick with GAP insurance (assuming you want to use it as either policy is intended) is to try to configure the policy so that it's prepared for the worst case scenario.  In which case, we need to look at the maximum possible "gap" that could possibly occur which, is for a write off to occur towards the end of the policy duration when your car has depreciated most and (in the case of Replacement GAP insurance) when the replacement price of a new equivalent is likely to be at it's highest over that time period.

 

Obviously, your car *could* perform much better than the finance company has predicted in terms of depreciation but equally, it *could* also perform worse.  The problem, is that you won't know until you "get there" and you're reviewing the offer of payout from your Motor Insurer and that point it is of course too late.

 

So... coming back to the issue of what Claim Limit is appropriate, with Invoice GAP insurance it's pretty straight forward in that we take the price you've bought the car for (that's a figure that won't change) and we deduct from that the GFMV of £10,900.  That gives us a figure of £19,800 so my advice would be that £20,000 should be the minimum limit (because the next option down is £17,500 and it's never a good idea to bet against the finance company) BUT (because the GFMV of £10,900 is a figure that is very much subject to change (positive or negative)) it's worth noting that this leaves only £200 flexibility/room for your car to have depreciated by more than the finance company have predicted in the event of a late claim so, it may well be prudent to step the claim limit up further and it just so happens that the next option up is £25,000.

 

In relation to Replacement GAP insurance, we take today's list price of £32,600 and deduct the £10,900 which leaves us with figure of £21,700.  This tells us that a £20,000 Claim Limit is *potentially* not going to be entirely sufficient in the event of a late claim PLUS there's the *potential* for the replacement vehicle price to have increased by the time of claim AND the *potential* for your vehicle to have depreciated to a value lower than predicted which could increase the gap further.  So, £25,000 in this case would IMO be the logical minimum Claim Limit.

 

In short (and I know I've been all around the houses explaining this but I think the logic is important), it's not that I expect you'll ever need a whole £25,000 to faciliate covering the "gap" with either policy (actually, this might be unlikely, but it's not entirely impossible), it's that there's a reasonable potential that you *could* (in the event of a late claim) require more than £20,000 and it's simply a case that there's no option to choose between £20,000 and £25,000.

 

Alternative logic

 

Another school of thought is that the average vehicle will depreciate by between 50% and 70% over a three year period.  Based on an original list price of £32,600 this gives a range of between £16,300 (50%) and £22,820 (70%). 

 

Now, you'd be particularly unfortunate to suffer 70% depreciation in this vehicle over 3-years even given your higher than average mileage BUT, you're looking here at a duration of over 3 years AND you're doing higher than average mileage so depreciation approaching 70% over the 42 months is not entirely out of the question... at a future value of £10,900 the finance company are predicting the car to lose 66.5% of it's value which kind of fits with this logic too.

 

To sum up...  If you choose a Claim Limit lower than £25,000 on either policy I think there's a pretty decent chance you'd regret it if you were unfortunate enough to suffer a late claim.  Although, if you stuck with say £20,000 as a Claim Limit and the gap at the time of claim was in excess of that figure, you'd still be paid up to £20,000 towards that gap which'd probably be of some assistance regardless... however perhaps the most important thing to note is that the difference in cost between the Claim Limit options at this level, is really quite insignificant:

 

Invoice GAP insurance:

 

£20,000 Claim Limit = £194.00 less 10% BRISKODA discount = £174.60

£25,000 Claim Limit = £201.70 less 10% BRISKODA discount = £181.53

£30,700 Claim Limit = £206.87 less 10% BRISKODA discount = £186.18

 

Replacement GAP insurance

 

£20,000 Claim Limit = £222.73 less 10% BRISKODA discount = £200.46

£25,000 Claim Limit = £243.87 less 10% BRISKODA discount = £219.49

£30,700 Claim Limit = £249.04 less 10% BRISKODA discount = £224.13

 

(Prices based on a vehicle invoice price of £30,700, 48 month policy duration (can be cancelled early (e.g. at 42 months if you're handing the car back or selling it on etc) and a pro-rata rebate claimed) and are valid as of 23/02/17)

 

Does that help clarify matters?

 

David

[tigermad]

Thanks for the excellent reply. Noticed earlier that I get 1 year replacement car with my insurance so would only need 3 years and defer gap for a year. Can this be done?

[David@GAPInsurance]

On 23/02/2017 at 21:18, tigermad said:

Thanks for the excellent reply. Noticed earlier that I get 1 year replacement car with my insurance so would only need 3 years and defer gap for a year. Can this be done?

 

Sorry- I missed this.

 

Assuming you're happy with the level of cover provided by your Motor Insurer in terms of "new car replacement" during the first year then yes, you could buy a 3-year policybut defer the start date by up to one year from when the vehicle was first registered.  This way we'd be covering just years 2, 3 and 4.

 

Revised prices below:

 

Invoice GAP insurance:

 

£20,000 Claim Limit = £142.61 less 10% BRISKODA discount = £128.35

£25,000 Claim Limit = £160.52 less 10% BRISKODA discount = £144.47

£30,700 Claim Limit = £165.69 less 10% BRISKODA discount = £149.12

 

Replacement GAP insurance

 

£20,000 Claim Limit = £178.36 less 10% BRISKODA discount = £160.52

£25,000 Claim Limit = £189.05 less 10% BRISKODA discount = £170.14

£30,700 Claim Limit = £194.21 less 10% BRISKODA discount = £174.49

 

(Prices based on a vehicle invoice price of £30,700, 36 month policy duration (can be cancelled early (e.g. if you're handing the car back or selling it on etc) and a pro-rata rebate claimed) and are valid as of 01/03/17)

 

However, before you commit to NOT having GAP insurance in the first year, you should read this which will assist you in determining whether the new-car-replacement cover provided by your Motor Insurer is any good or not

[tigermad]

22 minutes ago, David@GAPInsurance said:

 

Sorry- I missed this.

 

Assuming you're happy with the level of cover provided by your Motor Insurer in terms of "new car replacement" during the first year then yes, you could buy a 3-year policybut defer the start date by up to one year from when the vehicle was first registered.  This way we'd be covering just years 2, 3 and 4.

 

Revised prices below:

 

Invoice GAP insurance:

 

£20,000 Claim Limit = £142.61 less 10% BRISKODA discount = £128.35

£25,000 Claim Limit = £160.52 less 10% BRISKODA discount = £144.47

£30,700 Claim Limit = £165.69 less 10% BRISKODA discount = £149.12

 

Replacement GAP insurance

 

£20,000 Claim Limit = £178.36 less 10% BRISKODA discount = £160.52

£25,000 Claim Limit = £189.05 less 10% BRISKODA discount = £170.14

£30,700 Claim Limit = £194.21 less 10% BRISKODA discount = £174.49

 

(Prices based on a vehicle invoice price of £30,700, 36 month policy duration (can be cancelled early (e.g. if you're handing the car back or selling it on etc) and a pro-rata rebate claimed) and are valid as of 01/03/17)

 

However, before you commit to NOT having GAP insurance in the first year, you should read this which will assist you in determining whether the new-car-replacement cover provided by your Motor Insurer is any good or not

Thanks. I guess to be safe I might as well go for the 4 years with you. Will contact you when I get my car. 

[Brimma]

On 2/1/2017 at 12:28, Damo said:

Thanks David but I'm happy with the cover and term (some don't even take out Gap Insurance which is a bit silly if you ask me)

3 years cover should see me about ready to trade up again.

Great prices by the way, very happy customer

 

You're planning on keeping a car for 3 years?

 

Pull the other one :)

 

Edited 1 March, 2017 by Brimma

[DBT85]

Very late to this particular thread but it seemed daft to create another.

 

Just purchased a full 5 year Return to Invoice policy for the full £33500 for my new car. With the discount it came to £295. My dealer would go to £300 for a 3 year policy only. £60 a year for the peace of mind that if something happens I'm getting my money back. Bargain. 

 

Nothing I've bought before not having such an expensive car before, but in this case it seemed more than worth it. Now lets hope I don't have to use it!

 

I have of course just realised that I put in £33,500 and my invoice only says £33,495. Hopefully that won't cause me any issues. Probably best to ask tho.

[David@GAPInsurance]

23 hours ago, DBT85 said:

Very late to this particular thread but it seemed daft to create another.

 

Just purchased a full 5 year Return to Invoice policy for the full £33500 for my new car. With the discount it came to £295. My dealer would go to £300 for a 3 year policy only. £60 a year for the peace of mind that if something happens I'm getting my money back. Bargain. 

 

Nothing I've bought before not having such an expensive car before, but in this case it seemed more than worth it. Now lets hope I don't have to use it!

 

I have of course just realised that I put in £33,500 and my invoice only says £33,495. Hopefully that won't cause me any issues. Probably best to ask tho.

 

Thank you for your custom and feedback DBT85.

 

The "33500" won't cause you any issues but, should you wish, you can always log in to the customer area of the site and correct it :-)

 

Best wishes

 

David

[DBT85]

2 hours ago, David@GAPInsurance said:

 

Thank you for your custom and feedback DBT85.

 

The "33500" won't cause you any issues but, should you wish, you can always log in to the customer area of the site and correct it :-)

 

Best wishes

 

David

Thanks for the reply David.

 

I actually called one of your chaps up after making that post and he corrected it for me. 

 

Thanks again. £59 a year for 5 years for a ROI policy compared to £100 a year for only 3 years ROI from Skoda. Bargain.